AIDS DRUG'S MAKER CUTS PRICE BY 20%

By PHILIP J. HILTS, Special to The New York Times

Published: September 19, 1989

WASHINGTON, Sept. 18—
The Burroughs Wellcome Company cut the price of the AIDS drug AZT by 20 percent today after a month of mounting protests over its cost.

The company said it was reacting to the sudden growth in the demand for the drug, but a company spokeswoman, Karen Collins, said the protests were also a factor.

''We are certainly mindful of the needs of the patients and the desire for a price change in the medical community,'' she said.

AZT, or azidothymidine, slows the multiplication of the AIDS virus in cells. The only drug licensed to treat AIDS directly, it has been on the market since March 1987. $8,000 a Year It is one of the most expensive drugs ever sold; patients with advanced AIDS pay almost $8,000 a year for the drug alone, not counting tests and doctor's visits that bring the total nearer to $10,000. These costs have led critics to accuse the company of price gouging and of making it impossible for people without health insurance to get the drug.

With the price cut, distributors of AZT will now pay Wellcome $1.20 per capsule, down from $1.50. Advanced AIDS patients need 12 capsules a day; assuming that distributors continue to add about 30 cents to the price, patients will now pay more than $6,500 a year. People who are infected with human immunodeficiency virus but who have few or no symptoms of AIDS generally take five capsules a day, for a cost of about $2,700 a year.

Dr. Louis W. Sullivan, the Secretary of Health and Human Services, welcomed the announcement, saying it would reduce the cost of treatment with AZT. Representative Henry A. Waxman, the California Democrat who is chairman of the health subcommittee of the House Committee on Energy and Commerce and who has pressed the company to lower its price, called the announcement ''a good first step'' but added, ''I think the company could do better.'' He said Wellcome's cost to produce each capsule is ''clearly smaller'' than when the drug was first marketed.

Mark Harrington of the AIDS Coalition to Unleash Power, a group in New York that has been campaigning for an AZT price reduction, said the announcement was ''a pretty strong indication that the company has been profiteering all along.''

''It is a move in the right direction, but it is not enough,'' he added. Coming: Another New Drug

Besides the protests by his own group and 15 others, Mr. Harrington said, the planned distribution of another AIDS drug, DDI or dideoxyinosine, probably contributed to the price cut. DDI is made by the Bristol-Myers Company, which is expected to begin distributing the drug more widely within a week. DDI has not been licensed but is expected to be approved for distribution under a special Federal program to speed the drug to those who cannot tolerate the side effects of AZT.

Burroughs Wellcome, the maker of AZT, is a subsidiary of Wellcome P.L.C. of England. It is based in Research Triangle Park, N.C.

The protests over AZT's price began as soon as AZT was put on the market more than two years ago. Not long afterward, the company lowered the price by 20 percent, and it has remained at that level until today.

The demand for AZT has widened dramatically because of three successive announcements of research results this summer. The new findings indicate that a far wider group of patients could benefit from the drug than was previously thought. AZT was found in two studies to postpone symptoms of the disease for those who are infected with the virus but are showing few or no symptoms. And another drug, pentamadine, was found to hold off the severe pneumonia that is the most common deadly symptom of AIDS, prolonging the lives of many patients and increasing the time they would need AZT. A Change in Perception

With these announcements, the perception of the disease among health officials shifted. Formerly considered an invariably fatal disease that killed sufferers quickly once they developed symptoms, AIDS is now seen as a disease that can be treated early, possibly postponing the onset of symptoms for years.

Because those studies showed pentamidine and AZT to be effective for as many as 600,000 patients, in contrast to the 45,000 who had been taking the drugs, the markets have expanded sharply.

Those who can benefit from AZT, according to Federal researchers, are people who are infected with HIV and showing few or no AIDS symptoms, but whose critical immune system cells have been depleted.

In a press release issued today, T. E. Haigler Jr., president of Burroughs Wellcome, said that when the new findings on the broader usefulness of Retrovir, the company's brand name for AZT, were announced by the National Institutes of Health a month ago, ''we immediately commenced an evaluation of the feasibility of lowering the cost of Retrovir to patients.''

''The company has weighed a number of factors, including our responsibilities to patients and shareholders,'' he said. ''It now appears the number of patients will be growing considerably over time.''

The increasing demand, along with lower production costs that the company has achieved in the past year, Mr. Haigler went on, ''will reduce somewhat our financial risk and will remove some of the uncertainties which existed when the drug was first announced.'' Demand Expected to Soar

More than 20,000 people worldwide are now taking AZT, and industry analysts say at least 100,000 and perhaps several hundred thousand more will now seek the drug.